City Core
Keys stats this quarter
TAKE-UP FOR Q2 (SQ FT)
14% below the 10-year quarterly average
VACANCY RATE
PRIME RENT (PER SQ FT)
City Core
In the second quarter of 2024, City take-up declined to 780,000 sq ft, which was 25% below Q2 2023 and 14% less than the 10-year average of 904,000 sq ft. This was the weakest quarter for office take-up in the City since Q1 2023 when 608,000 sq ft was acquired. We suspect the uncertainty generated by the general election, which was called on 22nd May, impacted the figures.
The Financial Services sector was by far the largest source of demand, accounting for 51% of all take-up for the quarter, followed by Professional Services on 7% and TMT & Creative on 5%. We have noted lately that the line between the financial and technology industries in the City has become blurred due to the rapid expansion of Fin-Tech firms in the Square Mile.
The largest deal of the quarter was financial services group, Citadel, acquiring 252,000 sq ft at 2-3 Finsbury Avenue, EC2. In addition, Citadel has options to acquire an additional 130,000 sq ft in this 750,000 sq ft building. Also, fund manager, Invesco, leased 41,000 sq ft at 60 London Wall, EC2; while flexible offices company, Huckletree, took 30,000 sq ft at 8 Bishopsgate, EC2.
The City vacancy rate fell for a third consecutive quarter to 7.7% in Q2, down from 8.5% in the preceding quarter. The 10.4% vacancy rate recorded in Q3 2023 appears to have marked the peak for supply in this cycle, which bodes well for future rental growth prospects. The City Core prime headline rent remained unchanged quarter-on-quarter at £80.00 per sq ft in Q2, while the City Tower Rent was steady at £115.00 per sq ft.
KEY DEALS
Source: Avison Young
TOP TENANT SECTORS Q2
Source: Avison Young
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